Bitcoin has been performing better than Ethereum over the past few days, despite the fact that Ethereum is preparing for the most significant update it has ever released.
Bitcoin Is Putting Up A Strong Fight
Even though Ethereum’s long-awaited upgrade to Proof-of-Stake is getting closer, Bitcoin is still the cryptocurrency that everyone is talking about.
Monday saw further advances for bitcoin, which is presently trading at $22,229 per coin. Ethereum, on the other hand, is currently trading at $1,715 despite experiencing a decrease of 3.3%. Despite “the Merge” being closer and equities trading in the green across the board to start off the week (the S&P 500 is up 0.74 percent, the Dow Jones is up 0.54 percent, and the Nasdaq is up 0.55 percent), the second cryptocurrency market downturn has occurred.
Bitcoin has been showing strength since since it broke through support at $18,600 on Wednesday; since then, the leading cryptocurrency has risen by about 20 percent. Additionally, a positive divergence can be seen on the weekly RSI for the first time since March, and it can be seen on the monthly RSI for the first time since September 2021.
After reaching a 2022 high of 0.085 on Wednesday, the ETH/BTC ratio has been trending downward, which is an interesting development. It is currently trading at 0.077, representing a loss of 9.2%. Before ETH led a market-wide rebound in June, the ratio had previously reached 0.053; however, in order for ETH:BTC to return to the trough of its range, it would need to decrease by an additional 33.49%. “The ratio” refers to the number of ETH required to purchase one BTC at the current market price. At the current exchange rate of 0.077, one Bitcoin is equivalent to around 13 Ether.
Since reaching a low point at the multi-year support level of 39.79%, TradingView reports that Bitcoin’s overall market dominance (which indicates the top cryptocurrency’s share of the global cryptocurrency market capitalization) has increased to 41.28%. This comes after Bitcoin’s overall market dominance hit a low point at 39.79%.
Using the Merge as a Card Game
The decrease of Ethereum relative to Bitcoin has occurred amid increased expectation for its most significant upgrade in its entire history.
This week, the blockchain will “merge” from Proof-of-Work to Proof-of-Stake, which will result in a reduction of 99% in the amount of energy that is consumed and a reduction of 90% in the amount of ETH that is emitted. It is anticipated that The Merge would ship early on September 15, but ETH has not yet reclaimed its high point from August, which was $2015.
Even while the Merge would result in a reduced supply of ETH, which might have a long-term beneficial impact on the cryptocurrency’s price, there is still a possibility that the Merge could become a “sell the news” event, which would result in a selloff after the fact. Last week, BitMEX CEO Arthur Hayes told Bankless that he was hopeful about how the Merge could effect the price of ETH, but he allowed that it could suffer in the near term if investors sold on the news that the Merge was happening. In the crypto realm, occurrences like these are not uncommon. On April 14, 2021, when Coinbase made its initial public offering on Nasdaq, the price of bitcoin reached a multi-week high of approximately $65,000. The price then continued to fall for several weeks. Dogecoin, on the other hand, suffered a significant loss after Elon Musk’s appearance on Saturday Night Live as the “Dogefather” in a comedy that had been eagerly awaited since May 8, 2021. It has not yet climbed back to its previous heights.
It is possible that Ethereum may be eclipsed before its most significant update to date because Bitcoin’s market share is growing, and the ratio between the top two cryptocurrency assets is also on the rise. If this is the case, then there may not be a “flippening” on the horizon after all.
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